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DECISION No

DECISION No. 17/2002/QD-TTg OF JANUARY 21, 2002 ON THE ORIENTATIONS AND SOLUTIONS FOR THE DEVELOPMENT OF INDUSTRIAL COTTON PLANT IN THE 2001-2010 PERIOD

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of December 25, 2001;

At the proposals of the Minister of Agriculture and Rural Development and the Minister of Industry,

DECIDES:

Article 1.- The orientations and solutions for the development of industrial cotton plant in the 2001-2010 period aim to:

1. Supply raw materials for the textile industry so as to gradually reduce the import of cotton fibers, save foreign currencies and take initiative in production.

2. Contribute to the efficient restructuring of agricultural production, create jobs for about 400,000 agricultural laborers and tens of thousands of others in the processing industry, increase peasants� incomes, and contribute to hunger elimination and poverty alleviation.

3. Ensure the textile and garment industry�s sustainable development and competitiveness on domestic and foreign markets.

4. Strive to reach the acreage of 115,000 hectares and the outputs of 80,000 tons, satisfying 50% of the textile industry�s demand for raw materials by the year 2005, and then 230,000 hectares, 180,000 tons and 70% by 2010.

Article 2.- Development viewpoints

1. To mobilize all resources throughout the country and quickly expand the areas under industrial cotton plant in regions where the land and climatic conditions permit so as to gradually substitute the imported cotton fibers and strive to fully satisfy the domestic cotton fiber demand.

2. To develop cotton plant along the direction of formulating concentrated zones, cultivating heterotic strains with irrigation in dry season, applying high and new technologies so as to raise productivity and quality, reduce production costs and make the income per acreage unit higher than that from other crops under the same conditions.

3. To develop cotton plant in combination with the processing industry in localities.

4. To diversify products deriviating from cotton such as: fiber, oil, and animal feed, so as to increase the revenue sources in support of cotton growing.

Article 3.- Major solutions

1. On the planning of production areas: To develop industrial cotton in association with cotton fiber-processing establishments along the direction of formulating concentrated intensive and irrigated farming zones. First of all, to focus on the southern central coastal provinces of Ninh Thuan, Binh Thuan, Phu Yen and Khanh Hoa; the Central Highlands provinces of Gia Lai and Dak Lak; and several eastern-southern and Mekong River delta provinces.

2. On infrastructure investment: To give priority to investing in irrigation works (including: upgrading existing works, completing half-done works, and building new works) in concentrated areas, with specialized or intensive cultivation and irrigation, concretely:

Dau Tieng irrigation work, the system of irrigation works and reservoirs: Long Song river, Phan Ri � Phan Thiet, Luy river, Ca Giay river, Quao river (building Luy River reservoir), Dinh River 3, Ta Pao, Tan Giang, Binh Dinh, Dai Ninh, Upper Iasoup, Lower Iasoup, Ealau, Eamo, Krong Pa, Ajunpa, and Dong Tron.

Solidifying canals of the existing irrigation systems.

3. On investment in processing establishments: The investment in cotton-processing establishments must be made in association with raw material zones, advanced and modern equipment and technologies so as to ensure that high-quality products are turned out, compatible with the requirements of the textile industry.

- To upgrade the existing cotton-ginning plants and build new ones, so as to reach the capacity of about 470,000 tons of seed cotton/year by 2010.

- To build some cotton oil-extracting plants with the total capacity of about 200,000 tons/year.

4. On science and technology: To concentrate efforts on researching into the creation, selection and importation of cross-bred and disease-resistant cotton strains of high yield and high quality to satisfy production demand of peasants.

- To concentrate the investment in establishments that research and/or produce cotton strains, including prototype, parent and F1 cross-bred strains; to import prototype strains of high yield and high quality.

- To improve the techniques of producing cross-bred cotton strains, build up a network of strain-producing establishments, thus ensuring the adequate supply of strains for production.

- Nha Ho Cotton Research Institute, Southern Agricultural Science and Technique Institute, Me Kong River Delta Rice Institute, Southern Fruit Tree Institute, Central Highlands Agricultural and Forestry Science Institute, Agricultural Genetics Institute and Central Agricultural Scientific Research Institute (under Vietnam Agricultural Science and Technique Institute) shall have to work out programs and plans on the research into and application of technical, scientific and technological advances to the cotton plant, regarding strains, cultivation and processing, especially the creation of cotton strains by biological technology, so as to have strains of high yield and high quality, suitable to ecological conditions of each area, so as to satisfy production demand.

- To widely apply integrated prevention measures (IPM) to cotton plant.

- To enhance the work of agricultural promotion along the direction of socializing agricultural promotion, including agricultural promotion carried out by the State, agricultural promotion carried out by enterprises and voluntary agricultural promotion in order to transfer as soon as possible technical advances and new technologies in cotton growing and processing.

- To well implement the activities of inspecting and testing the quality of raw materials, as well as the classification of cotton fibers in order to ensure the quality of fabrics made of domestic cotton fibers, thus serving the increasing demand of people and the production of textiles and garments for export.

5. On investment and credit:

a) The State budget shall provide support for the investment in:

- Building irrigation works including reservoirs, base works, main canals and traffic systems under projects ratified by competent authorities;

- Upgrading cotton plant research institutes, strain-producing and F1 cross-bred cotton seed-processing establishments;

- Conducting scientific and technological research, carrying out agricultural promotion activities, and transferring technical advances;

- Supplying prototype and grandparent strains for establishments to produce cross-bred seeds for supply to peasants;

- Giving price subsidies for commodity strains for peasants for a duration of two years, the subsidy levels for the first year shall be 60% of the price at that time, and that for the second year shall be 50%.

b) The State development investment credit shall be given to projects on the upgrading and renewal of technology and equipment, as well as the building of cotton-ginning, cotton oil-extracting plants, and plants producing animal feed and fertilizers from cotton oil cake.

c) Vietnam State Bank shall direct commercial banks and credit institutions to lend capital to cotton growers under the Prime Minister�s Decision No. 67/1999/QD-TTg of March 30, 1999 on a number of credit policies in service of agricultural and rural development; and coordinate with Vietnam Peasants� Associations, Vietnam Women�s Union in expanding the forms of savings credit group and mutual borrowing group, thus creating more favorable conditions for peasants to borrow and use capital efficiently and be able to repay their debts.

d) The Bank for the Poor and the national target program on hunger elimination, poverty alleviation and employment shall prioritize the allocation of capital for industrial cotton-developing areas for re-lending to cotton growers, thus contributing to hunger elimination and poverty alleviation.

6. On tax and fund:

The Ministry of Finance shall study and adjust the level of input deduction when calculating the value added tax upon the purchase of seed cotton; exempt and reduce agricultural land use tax for areas cultivated with industrial cotton plant.

To establish industrial cotton price support fund in order to provide price subsidies for domestic cotton when the cotton prices on the world market fall. The fund shall be contributed by organizations and individuals that are engaged in the purchase and processing of cotton. The contribution level for organizations and individuals purchasing and processing cotton shall be 2% of the value of purchased seed cotton, and for organizations and individuals using cotton, it shall be 2% of the value of the cotton raw materials imported in the year, but not exceed 50% of the generated profits. Fund sources shall be calculated into production costs of enterprises. The fund shall be managed by Cotton Plant Association. The Ministry of Finance shall assume the prime responsibility and coordinate with the Ministry of Industry and Vietnam Textile and Garment Corporation in promulgating the regulation on the management and use of such fund.

7. On consumption and prices:

a) Member enterprises under Vietnam Textile and Garment Corporation shall have to sign contracts on the consumption of cotton fibers with domestic cotton-processing establishments. Cotton-processing establishments shall have to sign contracts on the consumption of seed cotton with producers or cooperatives. The contracts must clearly define the responsibilities and interests of the two parties, determine the minimum prices of seed cotton beneficial to producers, and such prices must be announced right at the beginning of the harvest so that the cotton growers feel assured. Organizations and individuals are encouraged to apply the form of two-way contracts, providing services, supplies (seeds, fertilizers, insecticides..), and advance capital and conducting agricultural promotion together with consuming seed cotton for cotton growers, step by step linking production to processing and consumption.

b) The Ministry of Trade shall coordinate with the concerned ministries and branches in building a system of market information and forecast and conducting trade promotion for textiles and garments, as well as cotton fibers and cotton oil, in order to set up the demand-supply relations and reasonable prices for these commodities, thus ensuring the interests of both producers and consumers; stepping up trade promotion and taking initiatives in integrating into the region and world.

8. On the development of various economic sectors: To encourage and create favorable conditions for organizations and individuals of various economic sectors to invest in the cultivation, consumption and processing of industrial cotton.

a) Vietnam Cotton Company and local State enterprises shall have to continue renewing their organization and management along the direction of providing services regarding seeds, supplies and techniques, and consuming as well as processing seed cotton.

b) To gradually set up cooperatives of cotton growers so as to support and help one another in term of supplies, techniques as well as seed cotton consumption.

c) To set up Cotton Plant Association, comprising cotton growers, consumers and processors, as well as cotton fiber importers with a view to protecting members� interests.

9. On directing the implementation organization:

a) The provincial People�s Committees shall, basing themselves on the overall planning on the development of cotton sector, have to direct professional bodies and enterprises in their respective localities to revise and work out detailed planning and specific plants on the growing of industrial cotton plant in their respective localities; approve and organize the implementation thereof according to their competence.

b) The Ministry of Agriculture and Rural Development shall have to perform its function of the State management over cotton production, assume the prime responsibility and coordinate with the concerned ministries, branches and provincial People�s Committees in working out planning and plans on the development of industrial cotton nationwide.

c) The Ministry of Industry shall perform the State management in the field of textile and garment, and direct textile and garment enterprises to consume cotton fibers turned out by processing establishments.

Article 4.- This Decision takes effect 15 days after its signing.

Article 5.- The Ministers of Agriculture and Rural Development; Planning and Investment; Industry; Finance; Trade; and Science, Technology and Environment, the Governor of Vietnam State Bank, the General Director of Land Administration, the General Director of Development Assistance Fund, the General Director of Vietnam Textile and Garment Corporation, the presidents of the People�s Committees of provinces and centrally-run cities, and the heads of the concerned agencies shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister
NGUYEN CONG TAN